Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 8 - Evidence, February 9, 2011
OTTAWA, Wednesday, February 9, 2011
The Standing Senate Committee on Transport and Communications met this day at 6:45 p.m. to study emerging issues relating to the Canadian airline industry.
Senator Dennis Dawson (Chair) in the chair.
[Translation]
The Chair: Honourable senators, I declare this meeting of the Standing Senate Committee on Transport and Communications in session. Thank you for being here today.
This evening, we continue our study of the Canadian air transport sector which has been referred to our committee. We are pleased to welcome from the Québec Airport Council, its general manager, Mr. Denis Robillard.
Mr. Robillard, you have the floor.
Denis Robillard, Director General, Québec Airport Council: Mr. Chairman, my name is Denis Robillard, and I am the general manager of the Québec Airport Council, better known as the CAQ.
First, I would like to thank committee members for inviting our organization to appear before you this evening to discuss the issues and challenges facing Québec's airports.
I would like to briefly introduce our organization. The mandate of the Québec Airport Council is to represent, regroup and provide effective services to our members in the province of Quebec, in order to contribute to the viability, development and security and safety of our airports. We are working in close cooperation with all organizations involved in air transportation in the province, such as: the Quebec Department of Transport, Transport Canada, NAV Canada, the Quebec Air Transportation Association and other associations across the country.
Our association presently represents 82 members, of which 41 own and manage a total of 65 airports, as well as 41 associate members. We operate a dynamic Internet site for sharing information and expertise, we organize an annual convention for our members, we publish a weekly information bulletin, we provide information briefings, for instance on the Safety Management System (SMS) put in place by Transport Canada, we support applications to both levels of governments for funding maintenance and development projects for our airports. As you can see, we provide a variety of services to our members.
I started out in airport management and civil aviation in 1973. I have 38 years' experience and have been at Transport Canada for 33 years. I retired in 2005, and I then worked for IATA as chief of international airport consultation for one year. I accepted the position of general manager at the Québec Airport Council in 2007. It is a job I love.
Secondly, a few words on airports in the province of Quebec. As you well know, Quebec is a vast territory, equivalent to three and a half times the area of France. Many regions in the province are isolated and are not connected to major cities by road or rail networks, in particular the Lower North Shore, Magdalen Islands and all the northern portion of Quebec; so air transportation is essential in those isolated regions in order to insure goods and people movement, as well as medical evacuations.
Therefore, Quebec airports are playing an important social and economic role; they insure the connection of all regions to the national air transportation system.
Quebec has a population of approximately seven million persons; in 2010, roughly 15 million passengers went through Quebec airports, including close to 13 million at Montreal-Trudeau. There are more than 100 aerodromes registered by Transport Canada. Canada has a total of 1,300 airports, 600 of which are certified. There are 35 certified airports in Quebec. Certified airports are airports with regular passenger services.
Approximately 35 Quebec airports presently offer regular air services in the province. Many other airports are also important because they serve a lot of other activities such as: medical evacuations, training schools, business aviation, aerospace industries, forest fire fighting activities, charter activities, crop spraying activities, aircraft maintenance, et cetera.
Therefore, air transportation is very important in Quebec and airports are playing a vital social and economic role.
Now I would like to talk about issues and challenges. There are some very big ones that Quebec has in common with the rest of Canada. However, Quebec is always a bit special, for various reasons.
I would like to discuss the main issues and challenges presently facing the province of Quebec airports and which essentially are of federal responsibility in the matter of air transportation. First I would like to talk about the Transport Canada Airport Capital Assistance Program, better known as Transport Canada's ACAP.
Let us thank Transport Canada for its good management of this program, which is essential for the survival and development of airports receiving regular air services in Canada.
Under the national airports policy issued by Transport Canada in the late 1990s, airports were transferred to municipal entities or airport authorities. The ACAP was established to help regional airports — not the airport authorities like the major airports — pay their capital costs. This program is absolutely vital.
The program has an annual funding envelope of $35 million for Canada. That is not very much when you know that a runway and runway lights for a small airport represent expenditures in the order of $4 million to $6 million. Not a lot of projects are done per year with those amounts, and this $35 million figure has been the same since the program started.
We at the Québec Airport Council believe that it would be more reasonable to consider an envelope of $50 million to $60 million. However, I must admit that Quebec has always received its share of the pie, approximately 25 per cent of the budget envelope per year. So we can say, in spite of everything, that this program has served Quebec well, even though the envelope should definitely be bigger.
The issue that greatly concerned us was that Transport Canada was not announcing that the program would continue. There were some delays after April 1, but Transport Canada ultimately announced that the program would continue. And it is better to congratulate it for granting $35 million than for us to receive nothing.
In any case, without this program, the regional airports would have to close down. That is clear. The program thus has an annual funding envelope of $35 million, which has been the same since 1995. We have already submitted to Transport Canada many suggestions aimed at improving this funding program, including, first of all, widening the program to include small airports. In a moment I will talk about small airports because this is a major problem.
Another suggestion is increasing the number of eligible project categories. Currently, all that is accepted by ACAP are runway rehabilitation projects. An airport is in fact a city and it is much more than a runway; an airport is a set of buildings, a set of roads, a set of infrastructures that are very costly to operate. We think this is an issue that will eventually have to be examined.
There is also the question of eventually increasing the budget envelope and simplifying management of the program. Transport Canada is open to that. However, it is currently quite complicated, especially in Quebec. I must admit that it is even more complicated because the airports cannot obtain funding for a specific project because the Government of Quebec has to issue an order.
For example, this year we nevertheless received several millions of dollars for Quebec's airports, but the Government of Quebec has not yet issued an order and the airports are thus not yet able to get their money so they can move forward with their projects. The situation is always the same: Quebec's airports are penalized twice. However, that is not the fault of the federal government as such.
The program was reviewed last year and some of our suggestions were retained, but not all. Transport Canada is very open to improving management and simplifying all that.
Now I am going to talk to you about the funding of small airports. I would say this is one of the major issues in Quebec and perhaps across the country.
As we indicated previously, only non-federal airports that receive regular air services are presently eligible for the Transport Canada ACAP program. This means that a great number of municipal airports are not eligible for a financial contribution toward their capital projects. Prior to 1993, there was a program for runway rehabilitation projects and municipal airport projects that was subsidized by Transport Canada. That program was abandoned and that had an impact on those airports that play a vital role in the communities, in economic development, safety, health and land use.
I said at the start of my address that Quebec is a big province and that airports really have a role to play in land use and opening up territories. So this is currently an issue for these airports. A number of airports are in very poor condition, as are their runways. We conducted a study three or four years ago, and it showed that approximately 10 to 15 airports scored between five and six, and even less, on a scale of one to 10, and lower than six is bad.
These airports are seeking funding from the federal and provincial governments. We founded the Quebec Airport Council a few years ago with great hopes when the federal government established the Canada Building Fund, Communities Component. Unfortunately, airport infrastructure was not included in the list of projects eligible for that program.
We really are caught in the middle, and Transport Canada and the Government of Quebec are aware of that fact. The Canada Building Fund, which is coming to the end of its life, currently has a provision for municipal airports for infrastructure projects. However, Quebec, which administers the program through the Department of Municipal Affairs, has not decided to accept the "airport" criterion, as a result of which we have no access to federal government funding. That is a major problem.
Needs are immense, mainly for runway rehabilitation projects, which cost many millions of dollars each.
For example, the airports of Victoriaville, Saint-Georges-de-Beauce and Lachute may not be international airports, but they are important airports for their communities. In Lachute, for example, there is a $3 million to $3.5 million project. The municipalities cannot really afford to pay that, and these airports have an economic impact on their communities. If they were not there, there would be an enormous impact on the survival of the regions.
We estimate that municipal airports in the province will need a total of approximately $50 million for the next five years in order to pay for their runway rehabilitation projects; let us mention the needs of the following airports: Amos, Dolbeau, Drummondville, Lachute, Matane, Rocher-Percé, Rivière-du-Loup, Saint-Georges-de-Beauce and Victoriaville.
Fortunately, during the last two years, some projects were funded by the Quebec government and/or Economic Development Canada for the Regions in Quebec, such as La Sarre in Abitibi, Alma airport in the Saguenay and Maniwaki airport. It is therefore essential to set up a program similar to ACAP in order to permit the funding of municipal airport infrastructure rehabilitation projects.
Our position at the Québec Airport Council — and this is the message I would like to send this evening — is as follows: we believe that the creation of a dedicated program for small airports would be an excellent thing for the survival of those essential infrastructures.
If not, if no dedicated program is established, we should at least have access to federal programs, to a broader program such as the Canada Building Fund, and there should be some coherence in all that. The problem is becoming very serious.
Lastly, Sherbrooke airport almost had to be shut down. It was necessary to invest $3 million, and a $10 million investment will be needed within five years. If Sherbrooke airport closes tomorrow morning, I do not think that would have as big an impact as if Jean-Lesage or Montreal-Trudeau closed, but Sherbrooke is nevertheless important to the Eastern Townships region.
A second important issue is federal regulations for airports. We fully support Transport Canada's objective to increase safety and security at Canadian airports. However, we deeply regret that Transport Canada does not have presently a global perspective of impacts caused to regional and municipal airports in Canada by all the new regulations; the combined effects of the simultaneous implementation of many very demanding new or revised regulations is creating a lot of pressure on small airports because they lack material, financial and human resources to implement all the new regulations within established time frames.
It is important to give more time to municipal and regional airports to get organized, obtain required budgets from the municipality, offer training to employees and airport users. It is thus imperative for Transport Canada to simplify new regulations and slow down the implementation process.
I will give you three examples to make this quite concrete. There is a new set of regulations, the safety management system. This is a very good thing, and I support it as a former Transport Canada employee who believes in the safety and security component. However, it is a set of extremely demanding regulations that must be implemented over two to three years for small airports and large airports as well. So very demanding new safety regulations are being implemented with security regulations, and all of that is happening at the same time.
The other problem is that small airports are often faced with the same requirements as are set for Montreal-Trudeau airport or international airports.
I must say that we did feel Transport Canada was open and listening to us — because we shout quite loudly — about at least simplifying the regulations and proceeding by stages rather than doing everything at the same time.
If everything were done at the same time, the regulations would not work because the airports often have only five, six, seven, eight, nine or 10 employees. That is not the problem at Montreal-Trudeau and Jean-Lesage in Quebec City. This is an example, the SMS, the aviation safety regulations and the new TP3 12 manual, which has to be implemented within a year. This is a very big problem.
With regard to airport rents, the amount of annual rent paid to Transport Canada by the airports included in the National Airport System, the 27, including our members in Quebec, namely Jean-Lesage in Quebec City and Aéroports de Montréal, Mirabel and Montreal-Trudeau, is also a major concern.
We fully support IATA's general manager's comments on January 20, that the total invoice amounting to $250 million in 2009 represents a useless commercial disadvantage for Canadian airports.
Let us add that this fiscal withdrawal, which has no equivalent elsewhere in the world, is affecting Montreal- Trudeau's competitiveness and is causing it to lose passengers to the American airports of Plattsburg and Burlington. Furthermore, all the airports in the National Airport System do not generate enough revenue to fund all their capital projects required to improve and expand their facilities. That is not the case at Montreal-Trudeau or Vancouver and Toronto, which are very profitable businesses. For example, Jean-Lesage Airport in Quebec City will need an additional $30 million over the next five years to expand its terminal building and build a new parking structure. Airport management intends to solicit financial assistance from the federal government, and we ask that the answer be positive. Jean-Lesage airport in Quebec City operates very well. It really has the wind in its sails. However, with regard to infrastructure, it is also the role of governments to help this airport take off. The parking structure is absolutely necessary. The $30 million figure is utterly justified.
With respect to noise management now, airport noise management is a very important issue, as is currently the case at Saint-Hubert airport south of Montreal. We support Transport Canada's position that it is the airport operator's responsibility to manage this issue by implementing, among other strategies, a local noise management committee of all concerned parties, including Transport Canada. Only an adequate consultation process will make it possible to strike an adequate balance between airport operators' needs and airport neighbours' quiet. This is the process currently being pursued at the Saint-Hubert airport. The problem stems from the fact that housing is increasingly approaching airports. A balance must be struck but it is difficult to establish. At the airport council, we advocate providing information so that new neighbourhoods are not built in the areas surrounding airports because people often do not realize that noise can be a major problem. Airports are entitled to exist as well.
I will end this presentation by proposing a few recommendations. I offer the following concrete recommendations: first, that Transport Canada implement a capital assistance program for local airports that are not currently eligible for the ACAP program, or at least that federal infrastructure programs provide project funding for small airports.
Second, I recommend that Transport Canada implement, in a more reasonable and progressive manner, its new regulations for regional and municipal airports and also acknowledge the necessity for a simplified set of regulations for those airports.
All airport managers agree that safety and security are priorities, except that they need the means to address them. There is a lack of communication between branches, such as between Transport Canada and other departments.
Third, I recommend that the federal government review its national airports rent policy in order to reduce rents and make those airports more competitive.
Last, I recommend that the federal government agree to partially fund development projects for smaller airports, such as Jean-Lesage in Quebec City, in the National Airports System.
[English]
Senator Frum: We heard in testimony yesterday that one of the problems with ACAP, airports capital assistance program, is that it was designed to help airports with fewer than 500 passengers a year, but there are airports with more passengers than that who are receiving funds from that program. In terms of the ACAP program, I was curious if that was something that was of concern to you.
Mr. Robillard: Can you repeat the first part of your question?
Senator Frum: We were told the ACAP program was designed to help those airports with 500,000 passengers or less.
Mr. Robillard: I heard 500; 500,000 is not the same thing.
Senator Frum: My apologies. There are some airports larger than that receiving some of the funds. I am wondering if that was an irritant to you as well.
Mr. Robillard: Not in Quebec. We do not have that situation in Quebec. It probably exists in the Northwest Territories and the Atlantic regions, but we do not have that situation in Quebec. I think the situation exists, and we would be sensitive to that issue.
Senator Frum: Looking at your recommendations, you are suggesting developing a second fund. With respect to the ACAP program, what about just enlarging that? Would that not be sufficient? Why is there the need for a second program?
Mr. Robillard: Both options would be good. The problem is that the majority of airports would not be eligible for ACAP, especially smaller municipal airports, which are very important in their regions and communities. These are not financed in any way.
ACAP or another program could be enlarged, but we recommend a dedicated program. A smaller airport is a different reality. You do not really have scheduled flight passengers and all of that, but these airports are essential for the local economy, for health reasons such as medical evacuation, and for the businesses in the community. These airports are essential.
Senator Frum: Do you have a sense of a threshold of what would constitute the appropriate size? I will give you a chance to get your numbers together.
Mr. Robillard: That would be very hard to determine because it is easy if you see number of passengers, but in these airports, there are no real passengers. There are charter flights and things like that.
It is a question of judgment. Usually, you will find one of these smaller type airports in a region or in a larger municipality, usually a municipality with a population of over 20,000, with businesses and everything. It is a judgment call. You do not have any criteria that would determine anything. It is really a judgment call. You have to use some figures, but you do not have precise criteria for that.
Senator Frum: I guess it would then be an economic driver. Would that be the way you would judge it?
Mr. Robillard: An economic driver would be good, as well as number of flights, the importance in the region and the population size of the region. You would need some of these criteria, but it would be a mix of criteria.
Senator Frum: If you think about this on a national scale, not just in Quebec, how many airports would qualify? In your mind, how many airports are we talking about?
Mr. Robillard: In Transport Canada before 1993, there was a program to finance these airports and there were criteria at the time. I would have to get a hold of them again.
I will give you some numbers for Quebec. We would be talking about approximately 30 municipal airports that would qualify for that, such as airports in Lachute, Saint-Georges-de-Beauce, Victoriaville and Drummondville. These are important communities.
Senator Frum: You could potentially be talking about thousands of airports that would qualify for this program.
Mr. Robillard: In Canada? Thousands would be an exaggeration. Quebec is very different from the other provinces. For example, in the West, they have a lot of what they call regional airports, which are eligible for ACAP.
In Quebec, we have many municipal airports, maybe more in percentage than the other provinces. In the Atlantic provinces, there are many regional airports eligible for ACAP as well. Quebec is special in that regard. We have something very different in Quebec.
Senator Frum: You guys like to fly.
Mr. Robillard: If you want a number, maybe a couple of hundred in Canada, at the most, maybe less than that.
The Chair: Senator Frum, as you saw today in the media, and you will again tomorrow, Quebec is always a little different.
Senator Meredith: Mr. Robillard, thank you for your presentation. I think you have made your case with us in terms of making a solid case for an assistance request.
Mr. Chair, I have a few questions. Do you want me to go through them all or go through round one and then to a second round?
The Chair: I will look to the faces of your colleagues and they will judge for you.
Senator Meredith: I only have 50. No, I am teasing.
The Chair: You can go in two rounds.
Senator Meredith: The first is in terms of what you have requested from Transport Canada and how receptive they have been to these recommendations that you have made. Given the fact that they are trying to weigh the safety of the airports and ensuring they are up to snuff, you spoke in your presentation about having to possibly close an airport and so forth, or that there was a need for that or some sort of fines.
Has Transport Canada responded to the recommendations that you have made to them? Have they been open to these recommendations?
Mr. Robillard: That is a very good question. I appreciate that question.
Transport Canada has been always open, but is getting more and more open to our recommendations. For example, the first draft of the new, proposed regulations for airport security was very complex. Those regulations would have imposed a big burden on the smaller airports.
We had a technical committee at Transport Canada where we represented all associations in Canada, and airports also. Transport Canada has been open to our comments. In fact, they came to our smaller airports to see the reality of what's happening and made drastic changes to simplify the new regulations that are coming up.
They will also phase it in, in two phases. Right now, we are completing the implementation of SMS, the safety management systems regulation, which is a complex implementation for airports. Transport Canada has been open to the idea of phasing in their new regulations on security.
Senator Meredith: Therefore, the financial cost to you for the upgrade would be minimized.
Mr. Robillard: Exactly, and administrative costs as well. They have been open.
The problem is still that departments do not seem to talk to each other. The Department of Transport has several branches, and it seems as if every branch has a new idea to improve regulations and they are not talking to each other. At the other end, we have the airports that are obligated to implement all these regulations at the same time.
The other thing that is not really fair is that, when these airports were given back to municipalities by Transport Canada, the number of employees on site was diminished. For example, I used to be airport manager at an airport at one time, and I had 25 employees. That airport was given back to the municipality, and now there are six or seven employees. Transport Canada has rationalized its airports and given them back to municipalities or airport authorities. Now, the regulations are becoming more complex and demanding of airports.
To answer your question simply, Transport Canada is open. We are working with them, and they are very sensitive to that issue. I think it is going in the right direction.
Senator Meredith: My next question is around fees. We understand that the landing fees and rents that are being charged and paid to Transport Canada are a problem. There was a phased-in proposal, in 2005, by then-Transport Minister Jean Lapierre. Has that affected the airports? How is the phased-in formula working for you with respect to the rents at these airports?
Mr. Robillard: To tell you the truth, it is not an issue. I think Montreal's Trudeau, Jean-Lesage and other airports are not happy with the way it is going right now. That phased-in approach there did not really satisfy the major airports.
It is a unique situation in the world. You have to consider that, when Transport Canada was operating major airports, the system was self-sufficient. Then these 27 major airports across Canada were given to airport authorities on the principle that they pay a fee to the federal government. That fee is quite huge.
You must understand that these airports have to pay for their infrastructure, and it is big business. With that fee, it is unfair competition with other airports in the world, in the United States and everywhere. It is the only country that has that kind of arrangement. They are not satisfied at all.
Senator Meredith: Thank you.
Senator Mercer: Thank you, Mr. Robillard, for being here.
I was confused when you said, in recommendation four, that the federal government accept to partially pay to develop projects for smaller airports in the national airports. How many airports are members of the national airports system in Quebec?
Mr. Robillard: Twenty-seven.
Senator Mercer: In Quebec?
Mr. Robillard: In Quebec, two — three, in fact, because there is Dorval, Mirabel and Jean-Lesage.
Senator Mercer: You referred to smaller airports, so let us go to Jean-Lesage for a moment. You have been specific about that airport. You talked about some $30 million over the next five years to expand the terminal and the construction of a new parking structure, et cetera.
How many passengers go through Jean-Lesage?
Mr. Robillard: That is a good question. I should have brought some figures. There are 13 million through Trudeau, so I would say around 5 million or 6 million. It has been expanding. The situation in Quebec City is not the same as it was 10 years ago. We are talking about an expansion in passengers and flights to the South. Jean Lesage has had a first phase of improvement of the terminal and is due for a second phase. Also, a parking structure is absolutely essential for that development.
Senator Mercer: It is over the 500,000-passenger level that serves as a cut-off?
Mr. Robillard: Yes.
Senator Mercer: In your list of airports that you gave us, I was confused because you obviously did not list them all. You said there were 35 airports offering passenger service.
Mr. Robillard: These were examples.
Senator Mercer: For example, Lac-Saint-Jean, the Chicoutimi airport is not on the list that you gave here.
Mr. Robillard: Yes, there are some more — Chicoutimi, the Bagotville airport, is undergoing a major project of around $20 million for the next 10 years. I did not make a thorough list of them all.
Senator Mercer: I wanted to ask a specific question about Bagotville because the airport at Chicoutimi is not just a commercial airport. It is also a military base.
Do they benefit from the fact that the military is there, that the facilities are being brought up to standards for use with the F-18s based at Bagotville, or is that a benefit that is shared with the municipal airport which operates as part of the military base?
Mr. Robillard: They benefit from having DND, Department of National Defence, there. All air sites, structures and facilities are managed by DND — so, yes.
Senator Mercer: In your third recommendation, you talk about the federal government's review of the national airports' rent policy, about an order to reduce rents and make these airports more competitive.
The other issue, the connection we have difficulty making, is airports are asking us to recommend a reduction in rents so they can become more competitive. Then consumers are saying if you are going to do that, we want it passed along to us in reduced ticket prices.
You did mention at least two American airports that are competition for airports in Quebec — Plattsburgh being the main one.
How do we do that? If we reduce rents, how do we ensure that by reducing rents to not just the three big airports in Quebec, but if we reduce the rents to other airports, that it will be passed along to passengers?
Mr. Robillard: Rents are only for 27 airports in Canada. These are from the national airport network in Canada. We have three in Quebec, and even if that rent disappears there, there will be no reduction in tickets because those are two different things.
These airports are major facilities. They are like cities, really. It is extremely expensive to operate them; with the new technology, with all the requirements for safety and security and with the infrastructure, they are really cities. You are talking about 25,000 people working just in the airport in Dorval.
Even if tomorrow the rent was not charged by the federal government, that economy there would go to the airport authority, to help them manage what is an extremely expensive operation. That would not touch in any way tickets for passengers. That is two different things.
Senator Mercer: In security issues, one of the major differences in airports in Canada in comparison to our competitors south of the border is the security at airports. In the United States, it is not a cost borne by the airports but a cost borne by someone else — in many airports, by the government of the United States as opposed to the local airports.
How big a percentage is the cost for security for local airports?
Mr. Robillard: You have to understand that the major costs for security are paid on passenger tickets; all the equipment is paid by CATSA, Canadian air transport security authority. Still, the airports also have to invest a lot of money to provide the facilities for all that equipment, personnel and so forth. They are not paying directly for the equipment. That is done through a percentage fee on the ticket.
[Translation]
Senator Fox: I have a question on funding for small airports. How is a small airport currently funded? You mentioned Lachute airport; I assume it is a municipal airport. So how is funding determined? Does the town of Lachute cover the operating deficit every year?
Mr. Robillard: It is a different combination at every airport. Most of the time, the budget is absorbed by the municipality. However, we are talking about operating budgets, but there is a variation; most of the time, the municipality covers the operating deficit.
The big problem, Senator Fox, is infrastructure. The average life of a runway, for example, or an apron, is approximately 10 years or so. These infrastructures were rehabilitated or installed in the early 1990s in a number of cases. So we are talking about facilities that are maintained and everything, but the fact remains that the big problem is still the infrastructure.
Senator Fox: These infrastructures were all built at one point, at a time when there was a federal program.
Mr. Robillard: Exactly. Very few municipalities can afford paved and equipped runways.
Senator Fox: In the case of the province of Quebec, you say the provincial government did not want small airports to be eligible for the Canada Building Fund.
Mr. Robillard: Absolutely.
Senator Fox: Knowing the strength of mayors, as you and a number of members of this committee do, to your knowledge, has the Fédération des maires des municipalités du Quebec put pressure on the provincial government to make this kind of project eligible?
Mr. Robillard: I met with the president of the Union des municipalités du Quebec, who was the Mayor of Maniwaki at the time. He is no longer mayor now. I must admit that people do not know how important small airports are, even the UMQ and the various bodies in Quebec. It is something that is becoming increasingly apparent. There is a lot of ignorance and small airports are very much being left to their own devices right now. All the mayors will promote their projects to the federal government, to the provincial government. Last year, for example, two projects were funded.
The first was at the La Sarre airport, in Abitibi. Really, $1.8 million; La Sarre is not a big municipality, but all the same. That came out of a federal fund that had nothing to do with the Canada Building Fund, but it was nevertheless Minister Cannon's constituency. I do not think he was very sensitive about his airport either. The second project was funded by a provincial program. Maniwaki was at the federal level, La Sarre at the provincial level.
The provincial government also funds projects through what they call the Quebec-municipalities infrastructure program, which is managed by MAMROT, but the big problem is that the federal government's Canada Building Fund has told the small airports and mayors of the municipalities that they can submit their projects.
The Canada Building Fund had a provision for local and municipal airports that allowed them to submit projects for infrastructure rehabilitation. The other Canadian provinces took advantage of that. In Quebec, however, the minister of municipal affairs, which managed the funding envelopes of the Canada Building Fund, had its own criteria. The first criterion applied to water mains and sewers. The second was for economic facilities, and they did not include airports.
At that time, I met with Minister Lessard of the Government of Quebec to make him aware of this issue because we are currently caught in the middle. We met with senior officials at the department of municipal affairs. They said: submit your projects; we will defend them on their merits, and we will try to find a program. Currently, I can tell you that we are really stuck between a rock and a hard place.
Senator Fox: You say there is currently no specific program at the federal or provincial level?
Mr. Robillard: No.
Senator Fox: All there is at the federal level is Canada Economic Development, which could conceivably fund an airport.
Mr. Robillard: That is a very good point. Canada Economic Development has funded certain expansion projects based on economic rationales, like the Trois-Rivières airport, for example. It received a grant from Canada Economic Development because it is an airport where the business maintains the aircraft that are assigned there; so there was an economic rationale. So Canada Economic Development nevertheless provides some funding, but it is not related to infrastructure rehabilitation; it is related to development.
Senator Fox: When the airports were devolved to the municipalities, there were no agreements with the provincial governments and municipalities under which the government would continue to assist in infrastructure development and rehabilitation?
Mr. Robillard: I will tell you frankly, because I worked on the airport devolution at Transport Canada; what was considered by the federal government was airports with passengers; the other airports were left to their own devices.
For the 27 airports in the national system, the problem does not arise because they generate enough revenue. The other airports with passengers have the ACAP. The remaining airports have been abandoned by Transport Canada.
Senator Fox: I assume a municipality wishing to open an airport will need Transport Canada's permission? Does it need permission from Quebec since it falls under that province's jurisdiction under the Constitution?
Mr. Robillard: That is a very good question. I doubt that a number have been built, but whatever. From a regulatory standpoint, this is exclusively a federal matter, coming within the purview of the Aeronautics Act. Not anyone who wants can establish an airport. You nevertheless have to meet standards, particularly zoning standards.
Senator Fox: Would the federal government require, for example, that the municipalities undertake to maintain a new airport in optimum condition?
Mr. Robillard: Yes, that is possible. It must be determined whether the municipalities can afford to fund those kinds of infrastructures.
Historically, these airports have been around for many years. You can ask yourself the question, for example, why in certain regions there are airports 50 kilometers away from, say, from Rouyn or Val d'Or. Those airports have been in existence for many years. If you try to close one, there will be an outcry of protest. We are dealing with a de facto situation.
I met with the mayors of those municipalities to determine whether they were just being capricious, whether those airports are important, or whether they continue to exist solely for private pilots to take off on weekends. It was confirmed for me that those airports are extremely important for business in those regions. Major businesses would not be in those regions without those airports. Consider the Canam Manac group in Saint-Georges de Beauce or Cascades, not far from the Victoriaville airport. You also have to consider medical evacuations and business uses.
In addition, these airports are not very far from Montreal. I worked as an airport manager in Baie-Comeau. I remember one time when there were forest fires and the airport was the only way out of Baie-Comeau, as the North Shore was served by only one road. Those airports play a very important role in Quebec.
Senator Housakos: How many of the 35 airports in Canada are used for commercial flights?
Mr. Robillard: Thirty-five. A certified airport receives regular passenger flights.
Senator Housakos: They receive private aircraft or commercial aircraft?
Mr. Robillard: Commercial.
Senator Housakos: Is that currently the case of Lachute or Drummondville?
Mr. Robillard: We are talking about certified airports.
Senator Housakos: There are 35 certified airports in Quebec that currently receive commercial flights?
Mr. Robillard: Under the regulations, regular air services are, by definition, scheduled commercial passenger flights.
Senator Housakos: Airports such as those in Rivière-du-Loup, Drummondville and Lachute are not included in the 35 certified airports?
Mr. Robillard: No. However, Gaspé is one of the 35 certified airports.
The Government of Quebec owns 24 airports. Most of those airports are certified because they have scheduled flights. Those airports are located in Ungava and across the province. Those airports are served by commercial flights and also by private flights. By definition, a certified airport must have regular passenger flights.
Senator Housakos: Do you agree that 35 regional airports is a few too many?
Mr. Robillard: I am going to give you my personal feeling on that. As I said, Quebec is a big place. Airports play a vital role in opening up Quebec's remote regions. There are a lot of remote regions in Quebec. I mentioned Drummondville and Victoriaville, which are located between Montreal and Quebec City. In those cases, you have to consider other economic aspects. However, some airports open up the territory of Quebec. Without those airports, passengers would not be able to travel to the major centres such as Montreal and Quebec City, and that would have an enormous impact from a health, safety and economic standpoint.
Canada is different from Europe, and from the United States to a certain degree, and Quebec even more. It is important that these airports be served by regular passenger flights, even if they are not profitable, otherwise the economic, human and social impact will be enormous.
[English]
Senator Johnson: Could you explain to me a little more clearly the provincial aspect in terms of the financing? You said that Quebec is unique in this respect compared to other provinces. Could you elaborate on that for the committee?
Mr. Robillard: Quebec is different because we have a government that has a different law than the rest of Canada. That creates a problem.
When there is a federal program, such as the Canada Building Fund program, all the other provinces can subscribe to that program, if there are criteria for airports, for example, and obtain the money from that program.
In Quebec, a municipality or an airport, for example, cannot get a grant from the federal government without passing through the provincial government which, in turn, will decide whether they will grant that money to the airport. This is done, for example, for ACAP, by decree.
With the ACAP program, all the other provinces have their money and their projects have been implemented whereas, in Quebec, we are still waiting. There is discussion between the federal and provincial governments and we do not yet have that decree. We are losing time and energy.
Senator Johnson: How long will this wait be?
Mr. Robillard: We are talking about a month still. We are pushing this issue, but it is really an issue that is over my head. I can only give you my impression. I think that the federal government cannot give money directly to a municipality. That is the law. That is the way it operates.
Senator Johnson: You have so many airports, as you mentioned to my colleague, and so this must be holding things up in a major way, increasingly.
Mr. Robillard: ACAP is mainly for runways and for equipment on runways. For example, we have Mont-Joli Airport, which needs snow blowers. Winter will be over and they will get their snow blowers. That is the situation.
Senator Johnson: It is not shovels, I suppose.
Mr. Robillard: The snow will have melted, and it will be that way. The situation is a bit sad but it is the way we operate.
Senator Johnson: In your opinion, what should the rent policy be for the international airports?
Mr. Robillard: It should at least be diminished, and it really should be eliminated. There are two reasons. As I said to Senator Meredith, major airports are extremely expensive to operate.
Senator Johnson: We know that.
Mr. Robillard: Second, if the airports make money, everyone around them makes money. Dorval, Toronto and Vancouver airports generate a lot of growth in their regions. This rent is really a burden for the profitability of these airports.
Senator Johnson: This is a common view amongst almost all of our witnesses.
Mr. Robillard: Also, we are the only country in the world with this.
Senator Johnson: I know.
Mr. Robillard: I worked for IATA, International Air Transport Association, with African countries, et cetera, as a consultant. They are following the same route as Canada did. Governments used to operate the airport; now they have airport authorities, but they are not imposing rents.
Senator Johnson: That has to go, and also the new regulations you are recommending as well, the simplified regulations for these airports, regional and municipal. Is it too complicated now?
Mr. Robillard: Absolutely. Now, when they design a regulation, they are designing for a major airport, but they are applying it to smaller airports.
As I said to Senator Meredith, Transport Canada is now more open to simplifying, but the message I want to convey to you tonight is that they must speak to each other. Someone should tell the Minister of Transport; I spoke to his head of cabinet about that and he agreed they should speak together and let us finish SMS and do security after or phase it in, in some way.
It is important for you to understand that Transport Canada used to give support for training; it is gone. Right now, it is our association in Quebec that organizes all the training for SMS. People from all across the airports in Quebec come to Montreal and Quebec. The provincial government gave us money so we could train all the airport managers and airport supervisors for that new federal regulation. We organized it.
As I am saying, at least if Transport Canada does not help us in training, they should introduce the regulations reasonably. Do you understand my point?
Senator Johnson: Yes, I do.
The Chair: Before I start the second round, I would like to remind our audience that the committee is currently studying emerging issues related to the Canadian airline industry. Appearing before the committee this evening is Denis Robillard from the Québec Airport Council.
[Translation]
Our committee refers from time to time to MTV. This means the airports of Montreal, Toronto and Vancouver, which together represent nearly 75 per cent of passenger operations in Canada. Should the government not consider those three airports and the other 26 as falling into two separate categories, without trying to adjust the same regulations for all?
Mr. Robillard: I entirely agree with you. That is what is happening with the airlines. The situations of the large and small carriers are different. Montreal, Toronto and Vancouver should be handled separately. The issues are different.
[English]
Senator Meredith: My colleague just talked to you about the elimination of rents. If they were eliminated, would there still be a need for you to tap into an ACAP-type program? The two presenters yesterday talked about $75 million that they would need for improvements to their airports. You talk about another $50 million; that is $125 million. If there were recommendations made and the federal government decided to eliminate the rents, would there still be a need to tap into an ACAP-type program?
Second, my colleague also mentioned the loss of passengers to the American airports. What are you doing to minimize the loss of passengers to the border airports in terms of the groups of airports that you have authority over? Again, consumers are looking, Mr. Robillard, for affordable air travel. I understand the geography of Quebec and in terms of the terrain, where you indicated in your report that they are not connected by rail or road, air transport is vital.
I always look at this from a businessman's standpoint in terms of how I can reduce some of my internal costs. Are there opportunities for some of these airports to merge to create some sort of a larger airport for freight and passenger transport, thus reducing some of these costs? There are three questions there.
Mr. Robillard: I will try to come back to the first question. Rents and ACAP are two things because rents are really for the 26 airports. If you would eliminate rents for these airports, I do not see what impact it would have on ACAP for the regional airports, because these are two different realities. You are talking about major businesses. These 26 airports are huge corporations, airport authorities. ACAP is really for regional airports that were given to municipalities by Transport Canada. If these regional airports do not have access to a program like ACAP, they will eventually — not disappear, but have a lot of problems. It will be a tragedy in Canada.
Your second question was about airport competition. There is not much we can do. Plattsburgh and Burlington are private industries and are offering opportunities and cutting prices. They are like little pirates, really. What can we do?
Senator Meredith: They are hijacking your passengers?
Mr. Robillard: They are hijacking our passengers. I think ADM, Aéroports de Montréal-Trudeau — and Jean- Lesage are their competition and some other airports are also trying to offer flights to the South. They are doing their best to offer the best product possible.
For example, now you have from Val d'Or and Sept-Îles direct flights to Cuba and the Dominican Republic. These are new products. They are offered at a good price so people do not have to go to Montreal to take another plane to the Dominican Republic. These are direct flights.
We are all doing our best. It is a business world. I invite these people from Plattsburgh and Burlington to our convention each year because I think they are bright. They are offering good products. Why should people cross the border to go there? It is because they are offering something better. It is not my role as the Québec Airport Council to do business for the airport. It is the airport manager's responsibility.
I think these guys have good ideas and we have to learn from them.
[Translation]
Senator Fox: My question is in the same vein as those of Senators Johnson and Meredith. It concerns the rent policy. When we talk about that, we are talking about the competitive aspect and about competitiveness among airports.
For example, I believe that Montrealers are hostages to Trudeau airport, and I do not know whether it is a large number, but some people perhaps travel to Plattsburg or Burlington. Moreover, if you look a little more to the west, to Vancouver, we see another large airport to the south, in Seattle, which competes with Vancouver airport. One witness who appeared last week said that, as a result of higher fares in Vancouver, one passenger on a flight from London to Seattle via Vancouver went down to Seattle and paid less than a passenger getting off in Vancouver, even though it is not as far. Are any major airports making a big effort to drum up tourist business? I cannot imagine Boston competing with Montreal or New York. When you mention Plattsburg and Burlington, that seems negligible to me.
Mr. Robillard: You are partly right. That might have been a bad example. That is a secondary argument.
You are absolutely right. I admit it. The big problem is nevertheless a major burden for the management of Aéroports de Montréal, which has had to finance the renovation, which cost hundreds of millions of dollars, and to issue shares in order to finance itself. And the federal government's rents are in addition to that. Another point I did not mention is the taxes paid to the City of Montreal for Pierre-Elliott-Trudeau airport, which are enormous. If you look at all those charges: rehabilitating infrastructure, expanding the airport, federal government rent, municipal taxes, you are right, Burlington and Plattsburg are not a big problem. That is something I wanted to point out. That is much truer for Seattle and Vancouver, but airports are in competition around the world. It is not just with our neighbours 500 kilometers away; it is also going on around the world. With today's connections, the world is getting smaller and smaller. So this situation exists only in Canada. So why?
Senator Fox: The fact that there are high rents at the MTVs, Montreal, Toronto and Vancouver, means that downward pressure is being exercised by the Aéroports de Montréal, for example, to recover rents. I assume a lot of people are unhappy, that it is those who operate businesses in the airport terminals. I assume that the carriers probably pay substantially higher landing fees at the MTV airports and elsewhere and that that in turn puts on pressure for higher individual passenger transportation fees. Is that part of the problem?
Mr. Robillard: Absolutely. Ultimately, someone always has to pay. These rents are passed on to all kinds of people, to passengers and to the people who operate the businesses at the airport, to the people who lease land to the airports, to the airlines. So ultimately, competition goes on at the international level as well, not just in Canada or the United States.
Senator Fox: Would your main argument be that, if rents were lower, that would enable ADM, Aéroports de Montréal, to generate higher revenue and profits and to reinvest in infrastructure?
Mr. Robillard: Absolutely.
[English]
Senator Mercer: As a suggestion, perhaps we could ask Mr. Robillard to do us a favour and, via the clerk, send us a complete list of the airports in Quebec by category. He said that 35 offer passenger service, et cetera.
Mr. Robillard: Do you want a complete list of the airports?
Senator Mercer: Yes. We all have an idea of the geography but, when the airports are listed by category, it is easier to understand.
[Translation]
The Chair: Thank you, Mr. Robillard. You need only forward that to the committee clerk.
Mr. Robillard, thank you for being here with us today.
[English]
The next meeting is Tuesday, February 13, when we will hear from the Canadian Border Services Agency. They have many fans around this table.
(The committee adjourned.)